Processing plant adds margin stability

Tom and Judy McCarty and their four sons have learned a lot since they moved to Kansas 12 years ago to try to forge a way that would allow the entire family to be involved in dairy farming, a three-generation family legacy.

But no lesson has hit home harder than this one: You have to find a way to protect yourself against the volatility of the commodity market.

The family operation, which includes McCarty Dairy at Rexford, Bird City Dairy and Scott City Dairy, has now added a new venture; an evaporated milk and pasteurized cream processing plant that opened last month at the family farm in Rexford.

The plant, which has the capacity to process 525,000 pounds of milk a day, will use all the milk from the 7,000 cows milked at the three dairies and will produce evaporated milk on contract with Dannon Yogurt to supply its Dallas-Fort Worth plant.

Key Points

• Processing plant was a way to build in margin protection.

• The plant will use all the milk from all three McCarty dairies.

• Processing adds value to the operation without increasing water use.

The processing plant has been built with the capacity to double production at some point in the future.

“Our goal in this feature was stable prices,” Tom McCarty told members of a Kansas Dairy Association tour group that visited the dairy and the plant in March.

“We’ve been hammered by the ups and downs in prices, and we just needed some way to build in a predictable margin.”

He said the plant has a five-year contract with Dannon to buy the milk at cost plus margin, which will give the McCartys the stability they need.

The plant has two raw milk silos that hold 50,000 gallons and about eight tanker trucks each. The raw milk will be heated to 95 degrees F and separated into skim milk and cream. The cream will move to pasteurization and the skim milk to the evaporation process.

The plant will process about 27,500 pounds of raw milk every hour and produce about 6,500 pounds of evaporated milk, 2,500 pounds of cream and 55,000 gallons of water condensed from the evaporation process.

“We will capture the water, filter it through UV sanitation and use it to sanitize equipment,” explained son Clay McCarty.

“The process is a 100% utilization of water. Not a drop goes down the drain.”

That is an additional reason the McCartys choose to build the processing plant.

“We were able to add 500 cows to our milking operation and include the processing plant — and will be using the same amount, or possibly less, water than we were using before,” Clay McCarty said.

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THE PLANT: After months of construction, the evaporated milk processing plant at McCarty Dairy in Rexford is ready to go into production.

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CAPTURED WATER: The red tank shown here will capture water from the evaporation process. Water will be filtered under ultraviolet light for purification, and then used to sterilize equipment in the processing plant.

This article published in the May, 2012 edition of KANSAS FARMER.

All rights reserved. Copyright Farm Progress Cos. 2012.